Mr Cable admitted that there could be "no immediate prospect" of the bank being reprivatised because this would result in a huge loss to the taxpayer.
But he made clear that he and his party are still keen for a future move that could see free shares being given out to the public.
"Certainly my party has advocated that option and we want to keep that option alive," he said on Wednesday. "There is a variety of options.
"It can remain in semi-public ownership for a prolonged period of time. It could be reprivatised when the positions are better.
"It could be mutualised, shares given to the public - the kind of thing my party, the Liberal Democrats, have been advocating. Those options are all open and we haven't foreclosed on any of them."
His comments came as RBS, which is 81% owned by the state, was due to announce a settlement with regulators over the Libor rate-fixing scandal.
The Government is putting pressure on the bank to use its bonus pot to pay the fines imposed by UK and US regulators, expected to be around £400m. It could also face criminal charges.
Mr Cable faced questions about RBS' future as he made a speech calling for banks to do more to help smaller businesses.
The Business Secretary, in a speech to Bloomberg, said easing the "credit bottleneck" for small and medium-sized firms (SMEs) was a "matter of urgency".
The call followed signs that the Funding for Lending Scheme (FLS) is boosting the housing market but making little difference to such companies.
The Bank of England's own surveys show credit conditions are better for large companies and people wanting mortgages than for SMEs.
"There has been a remorseless decline in lending to SMEs - by £7.8bn over the last 18 months with no sign of a turning point," he said.
He said mortgages are seen as relatively secure and large corporate businesses a "safe bet" in comparison to smaller firms, which are deemed riskier.
Mr Cable plans to look at whether the bank's criteria for the scheme are wide enough and will be talking to officials about how it could be improved.
"The alternatives - flooding the markets with the sort of cheap funding that creates asset bubbles, or else starving SMEs altogether - are not acceptable, sustainable or viable," he said.
"I long for the day when a small business owner doesn't cite access to finance as the biggest problem out there."
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